I can’t sell my business because I am the business!!…
The above howl of the Lone Wolf comes from individual service providers, solo professionals, consultants, artists, Real Estate and Insurance Agents, etc. Often home-based sole proprietors have a small niche or a special talent.
As the conductor of a one-man-band, many assume their business has little or no value to anyone else. They feel the most they can get is some value for their stuff. The hard or tangible assets like some inventory or a service truck or tools & equipment or their custom made One-Man-Band suit.
The greater value is often in the intangibles. These hidden values fall under “Ongoing Business Value” or “Goodwill”. These are pieces of value that can be identified, quantified and transferred to a new Owner by the Lone Wolf. We can show you how to sell your small business, but developing a list of your business assets.
Here Are Some Common Items That Can Help You Sell Your Small Business:
Customer Lists, Customer/Client Relationships, Trade Names & Marks, Logos & Service Marks, Domain Names, Website Content, Order or Production Backlog, Leases, Trade Secrets, Copyrights, Transferable Contracts, Non-Compete Agreements, Forms and Procedure Manuals, Data Bases, Supplier or Referral Lists, Patented and Unpatented Products or Technology or Processes, Use Rights, Licenses, Advertising Content, and many more…
A Lone Wolf Exit Strategy commonly includes a period of paid transition. Training and relationship transfer. This can be compensated in the form of employment, consultancy, and mentorship and in some cases a name licensing agreement with the new Owner.
Yes you can sell your One-Man-Band!!
As usual I’ve disguised the business in the following example.
Torn Hangnail, a loner, started and grew his special niche business for over two decades. Annual revenue hovered around $450K and after expenses & taxes he kept about $200K. His business is representing and brokering a number services to commercial and residential property owners. Roofers, plumbers, landscapers, Etc. Many of the service providers are also Loan Wolves and use Torn as their “Sales Department”. Can you have a pack of Loan Wolves?….
Torn had one year contracts with about half of his service providers but the rest are handshake relationships. The business assets consisted of a mostly blue SUV and some office equipment totaling about $20K.
Torn saved up and wanted to retire but was convinced that the business didn’t have value if he left. He didn’t want to just walk away and leave his service providers and customers in limbo.
In our first meeting I went through the “do-yah-have” list.
Remember those intangibles? Torn’s business had the following:
A database with a full history of diverse Customers. Detailed information on all Service Providers and Suppliers. A projectable revenue stream from a repeat business history. The Hangnail Services Trade-Name. A domain name and website with great content and a Quality Assurance and Control process for each Service Provider.
The twelve-month Exit Plan included:
- Cleaning up all the QuickBooks financials.
- Putting almost all of the Service Providers under contract.
- A full financial retirement plan for Torn
- Writing a copyrighted step-by-step manual of Torn’s methods and activities.
- Creating a Buyer profile.
- Target marketing the business.
- Tax friendly transaction design.
- Two month post close transition.
The business sold to a new Lone Wolf for $460K with an SBA guaranteed loan. Once again, It’s all in the presentation.